Sanford Health Plan is eying growth opportunities in its Medicare Advantage and exchange businesses, and possibly expanding into Medicaid, as larger insurers worry about shrinking government plan membership next year.
Higher medical costs and older adults receiving more care, along with increased federal oversight over Medicare and Medicaid carriers, has challenged many insurers operating government-sponsored plans. But Sanford Health Plan President and CEO Dr. Tommy Ibrahim, an internal medicine physician who moved into the position in January, sees opportunity in those markets for the smaller plan.
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Sanford Health Plan, a regional plan affiliated with Sioux Falls, South Dakota based-Sanford Health, serves 200,000 members in North Dakota, South Dakota, Minnesota and Iowa. It is considering expanding its presence more nationally by partnering with other regional plans and providers.
Ibrahim, who previously served as Cooperstown, New York based-Bassett Healthcare Network’s president and CEO, said Sanford Health Plan's experience in rural areas gives it an advantage as Medicare Advantage enrollment grows in there. This interview has been edited for length and clarity.
How important are size and growth opportunities for Sanford Health Plan as a small insurer?
We're evaluating a number of different growth strategies, exploring both organic and inorganic opportunities. If you look at the Dakotas, there's opportunity there to maybe move membership from one plan to another. But I think the overall sort of limitations the population poses is that it’s somewhat constrained. We can only grow so much organically, which opens up the discussion internally about what other inorganic opportunities might exist.
We're looking at other regional health plans that might be interested in opportunities to partner and collaborate. We're also excited about a potential joint venture approach to launching a broader, national footprint where we partner with like-minded physician groups, accountable care organizations and [independent physician associations] that are inclined to play in the value-based world and might be interested in bringing Medicare Advantage and other products into their local markets.
We're talking to a number of those kinds of groups to explore [joint ventures] where the health plan serves as the chassis and the ACOs, medical groups, [and independent physician associations] serve as the care delivery assets that are necessary to be successful in the process. That is one of a number of ways we're exploring growth opportunities.
Are you looking at rural or urban markets for national growth?
Our niche in rural healthcare and our strength as the largest rural healthcare system in the country is an important strategic advantage for us. We want to lean on that, at least early on, to evaluate those kinds of rural opportunities that might exist across the country and partner with those organizations that are interested in doing something similar. That's going to be our starting point. If opportunities along the way present themselves in other markets, we'd certainly be interested in entertaining those.
Is there a certain part of the business where you’re looking to grow your membership?
We see the governmental space, in particular, as an important area of our growth for the future.
Over the course of the past five or so years, specifically, we've started to expand the portfolio of capabilities. We’re still very strong in the commercial space, but we've developed a really strong presence in the [Affordable Care Act] in the individual market across this region.
About three years ago, we worked closely with the care delivery side of the organization to launch a Medicare Advantage product. We're early in that journey, but we've been able to demonstrate some pretty incredible successes to date. We have more than 5,000 members across our MA and [institutional special needs plan] products. And we've been able to also demonstrate high quality, excellent experience scores.
Some of the statistics that we're seeing around MA penetration nationally now crossing that 51% mark and showing signs of continued growth over time is something that the entire industry is taking interest in. We view MA in particular, and potentially even Medicaid, which we’re not in currently, in a variety of states as opportunities for us to position for long term growth.
Are challenges related to medical costs and the regulatory landscape affecting your Medicare Advantage plans?
I mean of course. What’s going to happen is both regional and national plans are going to respond by adjusting pricing models and benefit designs.
We're in a little bit of a stronger situation given we're still relatively small in the MA space, and somewhat resilient in the fact that, as we grow, we will adjust to the pending regulatory landscape and design programs, benefit packages and pricing models that make sense for our community, and also enable us to grow and compete. We're feeling pretty good about it right now.
Are you considering cuts to Medicare Advantage supplemental benefits or exiting markets, like other carriers?
Those are the benefit design questions that we're asking ourselves. But the impact is going to be very minimal given our small footprint right now across our region. Members aren't going to feel it as much as they might with some of the larger payers that have many more members than we do.
We're less worried about that and more focused on how we can continue to leverage our Sanford brand, the benefits of being an integrated healthcare delivery system, and the vertically connected assets we already possess. We’re really trying to differentiate ourselves around the member experience to try to stand out. We think we're in a good position.
How does Sanford Health Plan’s growth strategy fit into the enterprise as a whole?
We believe that having a strong and resilient health plan is an important part of Sanford Health’s strategic future as a whole. That diversification strategy creates resilience given the various environmental and economic challenges that face us as an industry. Our Board of Trustees, our leadership team, everyone is focused on making sure that we position the health plan to be a strong part of our overall health system assets.
